CGT event on acceptance of offer

[suzieq]

Hi all,

Just need a little bit of clarification. We have just had an offer come in for a property that we thought would probably not move until next financial year. This offer is full listing price subject to finance. The O&A is being posted to us and we should receive it mid-week.

My question is - from a Capital Gains point of view, if we don't ACCEPT the offer until 1st July, then is the CGT event calculated in 07/08 financial year?

Is it the OFFER date from purchaser or our ACCEPTANCE date that is the determining factor by the ATO?

thanks in anticipation.

sq

 

[Ross]

SuzieQ

Thats my understanding
I sold a property (offer and acceptance in June 06), settlement in Jul 06
I was hoping to delay CGT a year but CGT event I was told its based on offer and acceptance date

Ross

 

[davea]

could it be the date written on the contract for CGT purposes

 

[Jacque]

The contract date (or unconditional exchange) is the important one, for CGT purposes. It's at this point that the purchaser cannot back out of the contract, without forfeiting 10% of the deposit to do so.

 

[davea]

so say you sign on the 30 June 2007 with a 5 day cooling off period, does this mean for CGT purposes the date is 6th July, which is unconditional exchange?

i thought it would of been the 30th...

 

[Jacque]

so say you sign on the 30 June 2007 with a 5 day cooling off period, does this mean for CGT purposes the date is 6th July, which is unconditional exchange?

i thought it would of been the 30th...

You are right, Dave- the contract is still dated the 30th (as it's the date of exchange which is offer and acceptance by both parties) for CGT purposes. However, my point is (which probably wasn't worded very well!) that, should the purchaser withdraw during the following cooling off period, then there's no sale at all.
I'm going through this very scenario with a buyer on one of my own properties at the moment, and I'm seeking an unconditional contract by the end of the week, hence the need for him to sign with a 66w. I hate cooling off periods, as a seller- I'd rather allow my purchasers to do all their due diligence and sign when there's nothing else to negotiate over

 

[suzieq]

Thanks for all your replies.

So by the time we get the contract from the agent, sign it and send it back we would have accepted it on 1st July, so from what I can gather our CGT will be calculated in next financial year.

cheers

sq

 

[BUNDY]

My accountant advised me that the date for CGT is calculated from the date of acceptance (ie, the date that both parties sign and agree on a price on the contract), not the date of offer.

It don't beleive that it has anything do with the cooling off period or a contract being unconditional.

Can anyone else shed light on this?

Bundy

 

[Alanna]

Calculated from last date on the contract (ie acceptance co-signed date). Therefore, if you have had an ongoing to and fro involving counter offers, it is the date that is next to the last price (agreed upon).

Regards
Alanna